Lenzing AG

EANS-Adhoc: Lenzing AG
Restructuring and Staff Reductions in the Corporate Business Areas Engineering, Maintenance and Lenzing Technik as well as Repositioning of Lenzing Technik

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  ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
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  announcement.
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Strategic management decisions/Company Information
28.11.2014


The Lenzing Group is resolutely and systematically counteracting the ongoing
difficult market conditions in the global fiber industry on the basis of its
cost optimization program as it reported on the occasion of publishing its
business results for the first three quarters of 2014. The organizational
optimization measures launched one year ago at all sites and in all business
areas are having a positive impact. The results achieved up until now are
encouraging but by far insufficient to offset the decline in viscose fiber
selling prices on the international marketplace. 

Lenzing continues to anticipate good volume demand for all man-made cellulose
fibers. However, fiber selling prices on the global market are not expected to
recover in upcoming quarters. This development is also attributable to the
substantial decline in polyester fiber prices as a result of the massive oil
price decrease, and the expected longer-lasting period of low or at least
volatile cotton prices as a consequence of the surplus supply of Chinese cotton.
  

For these reasons, the Lenzing Group will not implement any major new projects
at the Lenzing site or abroad in the foreseeable future which are designed to
expand its viscose fiber production capacities. The investment volume of the
company will be adjusted to reflect the current market situation and will be
significantly reduced in the subsequent years. This should contribute to
improving the supply situation on the international viscose fiber market, which
the company would like to sustainably profit from in its role as one of the
world's largest producers.  

Due to the successful completion of the new TENCEL® fiber plant in Lenzing and
the reduced investment volume, technical planning and production capacities
cannot be maintained at current levels, especially at the Lenzing site. This
necessitates a reorganization of Lenzing's internal engineering and maintenance
business areas and its subsidiary Lenzing Technik GmbH. Organizational
structures in these areas have to be adjusted to future requirements.

All in all, the restructuring measures will impact up to 250 jobs (including
one-third temporary staff), mainly at the Lenzing site. The distribution of the
job cuts among the various sites will be determined by the beginning of 2015
within the context of a project which is already under way. In this connection,
Lenzing will try to avoid layoffs and strive to reach a mutually acceptable
solution with the affected employees as it succeeded in doing within the context
of the first cost optimization program. 
During initial talks on this issue held with the Lenzing Works Council, Lenzing
agreed to extend the current redundancy program (social plan) and to offer the
possibility for employees newly affected by the downsizing to transfer to the
Lenzing Labor Foundation.

At the same time, Lenzing is working on a strategic reorientation of its
subsidiary Lenzing Technik GmbH to enable it to focus more strongly on the
external market in the future.


Further inquiry note:
Lenzing AG
Mag. Angelika Guldt
Tel.: +43 (0) 7672-701-2713
Fax: +43 (0) 07672-918-2713
mailto:a.guldt@lenzing.com

end of announcement                               euro adhoc 
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issuer:      Lenzing AG
               
             A-A-4860 Lenzing
phone:       +43 7672-701-0
FAX:         +43 7672-96301
mail:     a.guldt@lenzing.com
WWW:      http://www.lenzing.com
sector:      Chemicals
ISIN:        AT0000644505
indexes:     WBI, ATX, Prime Market
stockmarkets: free trade: Berlin, official market: Wien 
language:   English
 

 


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